​Supply operating in ERCOT has kept pace with demand growth so far, and wholesale prices in 2026 remain low. Modo Energy’s Central Scenario expects this balance to shift in the late 2020s. Large-load demand, led by data centers, is projected to grow at a rate that will make scarcity conditions more frequent again. New gas capacity, meanwhile, is likely to remain constrained by turbine availability and cost until the mid-2030s. As a result, more hours of the year are projected to rely on the most expensive part of the supply stack. The margin between firm supply and peak demand is expected to be at its narrowest around 2032.

In the Central Scenario, around-the-clock (ATC) wholesale prices are expected to rise from $36/MWh in 2027 to a peak of $150/MWh in 2032. They then ease to $72/MWh by 2049 as new solar, battery and, later, gas capacity comes online. TB2 spreads, a proxy for battery arbitrage revenue, follow a similar path. They are expected to dip to $2.8/kW-month in 2027, below the $3.7/kW-month recorded so far in 2026, as battery additions outpace growth in evening demand. TB2 spreads then recover towards a $10.4/kW-month peak in 2032 and settle around $6.2/kW-month by 2049.

Compared with Modo Energy’s July 2026 release, the outlook is softer in the near term but tighter in the early 2030s. The 2027 ATC price is around 24% lower, while the peak arrives a year earlier and sits $17/MWh higher. The higher peak reflects faster large-load growth, with large-load demand around 30% above the July forecast in the early 2030s, and higher gas prices. Long-run prices are lower, at $72/MWh in 2049 against $87/MWh.

This article covers Modo Energy’s ERCOT fundamental market outlook through 2049, as of the October 2026 (Q3) release. All values are in real 2025 dollars. The forecast starts in 2027, and 2026 values are year-to-date actuals.

Modo Energy has assessed over 4 GW of battery projects globally, supporting $4 billion in investment decisions. The Modo Energy U.S. advisory team is available for deal-specific support. For questions about this article or advisory inquiries, reach out to alejandro@modoenergy.com.

Executive Summary